Nupetco Associates, LLC v. Allen

2012 UT App 65, 273 P.3d 432, 703 Utah Adv. Rep. 22, 2012 WL 653652, 2012 Utah App. LEXIS 65

• Court: Court of Appeals of Utah
• Decided: March 1, 2012
• Docket: 20110931-CA
• Status: Published

Opinion

DECISION

PER CURIAM:

T1 Cari Allen appeals the district court's denial of her motion to set aside the judgment under rule 60(b) of the Utah Rules of Civil Procedure. This matter is before the court on Nupeteo Associates, LLC's motion for summary disposition on the basis that the grounds for review are so insubstantial as not to merit further proceedings and consideration by the court.

[2 Nupeteo initiated a lawsuit against Allen concerning several promissory notes signed by Allen. During the course of the lawsuit, Allien argued that a settlement agreement between the bankruptcy trustee for Log Furniture, Inc., another party to the notes, and Nupetco constituted full satisfaction and payment of the notes and released her from liability. The settlement agreement had been approved by the bankruptey court. The district court disagreed and en tered a judgment against Allen in the amount of $187,774.66 plus interest. Allen did not appeal the judgment. Instead, Allen filed a motion pursuant to rule 60(b) of the Utah Rules of Civil Procedure for relief from the judgment. In her motion Allen argued that the district court lacked jurisdiction and that the judgment was void because only the bankruptcy court had jurisdiction to interpret the settlement agreement. The district court denied the motion.

T3 On appeal, Allen argues that the district court erred in denying her rule 60(b) motion because the bankruptcy court had exclusive jurisdiction to interpret the settlement agreement. The district court did not err. The United States Code sets forth that "the [federal] district courts shall have original and exclusive jurisdiction of all cases under title 11," ie., the bankruptcy code. However, in cases merely "arising in or related to cases under title 11," the federal district courts have "original but mot exclusive jwrisdiction." 28 U.S.C. § 1834 (emphasis added). Thus, the bankruptey court does not have exclusive jurisdiction over actions that are ancillary to bankruptcy cases. As a result, state courts of general jurisdiction may have jurisdiction over cases "arising in or related to" bankruptcy proceedings. Therefore, because this case was not a bankruptcy case, but was related to a bankruptey action, the district court had jurisdiction to adjudicate the dispute as between Allen and Nupet-co, neither of whom had sought protection in bankruptey court.

14 Therefore, because the district court had jurisdiction to interpret the terms of the settlement agreement, the district court did not err in denying Allen's motion for relief from judgment. Affirmed.